Mutual funds significantly increased their equity investments in November, more than doubling their net buying to ₹43,465 crore, compared with ₹20,718 crore recorded in October.
The rise comes on the back of sustained inflows, supported largely by resilient retail participation.
Data from SEBI shows that mutual funds purchased equities on most trading days last month, withdrawing money on only two occasions when they sold ₹2,473 crore. This consistent buying helped lift overall market sentiment.
The benchmark indices responded positively to mutual fund activity. The Sensex climbed 1,729 points, or 2 per cent, to close at 85,707, up from 83,978 on 3 November. The Nifty also advanced 440 points, reaching 26,203 from 25,763 in the same period.
While equity inflows surged, mutual funds turned net sellers in the debt segment, offloading ₹72,201 crore compared with ₹12,771 crore in October.
In contrast, foreign portfolio investors reversed their trend, withdrawing ₹3,765 crore in November following a substantial net investment of ₹14,610 crore the previous month, according to NSDL data.
Strong SIP Momentum and IPO Activity Drive Optimism
Analysts attribute the buoyant flows to improving fundamentals and consistent retail commitment.
Nirav Karkera, Head of Research at Fisdom, said retail inflows have remained robust over recent quarters, noting that recent corrections have removed some valuation excess across sectors.
Karkera added that encouraging macro indicators and earnings prospects have fuelled renewed optimism.
Nirav Karkera also highlighted the resurgence of the IPO market, which has added large, high-quality companies to the listed universe and offered investors access to emerging growth stories.
Industry leaders say the momentum in equity flows reflects a wider trend.
This year marks the fifth consecutive year of positive equity inflows for mutual funds, with Systematic Investment Plans continuing to play a central role.
According to the Association of Mutual Funds in India, over 95 per cent of SIP accounts are linked to equity-oriented schemes.
Nilesh Shah, Managing Director of Kotak Mahindra AMC, said SIP inflows are expected to remain strong, supported by favourable investor experience and expectations of improved corporate earnings next year.
Shah noted that SIP cancellations account for around 5 per cent of active accounts as many plans reach the end of their tenure.
Archit Doshi, Senior Vice President at Prabhudas Lilladher AMC, said nearly 40 per cent of funds have delivered SIP returns above 15 per cent over the past year, while another 39 per cent have generated between 10 and 15 per cent, reinforcing confidence among investors.
Despite periodic SIP stoppages making headlines, overall inflows have risen 12 per cent, touching a record ₹29,529 crore in October, compared with ₹26,400 crore in January, Doshi added.
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